News

DEMAND FOR SPACE INTENSIFIED IN 2021 Demand for industrial space in Orange County, already one of the hottest markets in the country, continued to set records in 2021. Out of a total inventory of 274.1 million SF surveyed by Lee & Associates, only 5.8 million SF are vacant. Year-over-year rent growth averaged a record 16% countywide in 2021. Net absorption in 2021 totaled 1.8 million SF. It was the most tenant growth in six years,…

DEMAND IMPROVES BUT DELTA SOWS CAUTION Office demand resumed in most of the county in the third quarter amid an economy straining to return to pre-pandemic normalcy, but tenants continued to shed blocks of space in the county’s largest market around John Wayne Airport. Nearly 540,000 SF of Q3 growth was reported in the North, Central and South County markets, which total 64.1 million SF. South County posted 318,539 SF of net absorption, its strongest…

VACANCY HITS NEW LOW ON RED-HOT DEMAND Industrial users leased 1.8 million SF of space in the third quarter. It was the most three-month net absorption in 17 years. The strong tenant expansion also drove down the vacancy rate to an all-time low. The intensified demand reflects national trends. Businesses are reacting to pandemic-fueled e-commerce growth along with disruptions at several points in the global supply chain, affecting everything from raw materials to finished goods….

Q3 2020 ORANGE COUNTY OFFICE MARKET REPORT Encouraged by effective vaccine distribution and improved economic data, companies in the second quarter leased the most industrial space in a three-month period in Orange County since 2015. Net absorption totaled more than 1.1 million SF in Q2 and more than 2 million SF since the third quarter of last year. It’s been 23 quarters since growth topped 1 million SF. In the last three quarters the vacancy…

MARKET IMPROVES ON VACCINES, ECONOMIC NEWS With encouraging economic news and an effective vaccination campaign that dramatically reduced infections, the office market showed hints of stabilization as companies hold to their plans for post-Covid office re-openings in the third quarter. Second-quarter net absorption was negative 169,466 SF, a significant improvement from the negative 2.3-million-SF total of the previous three quarters. But for the new space included in the 117.4-million-SF inventory in Q2, net growth would…

COVID HITS THE AIRPORT MARKET Companies in the Airport market shed a near-record volume of space in the third quarter, forcing the countywide office vacancy rate up 73 basis points to 11.6%, as the economic shock of the Covid pandemic rippled through the county. The Airport market, which has 37% of the county’s 117- million-SF inventory, was 724,151 SF in the red in the third quarter, the most negative absorption since Q4 2007. It drove…

DESPITE COVID, LEASING ACTIVITY GAINS The Covid-19 pandemic eased its grip on the industrial market as third-quarter leasing activity bounced back along with slight improvement in overall absorption. Rental rates in 2020 have increased at a slower rate than any year since 2008. Net absorption was 150,642 SF in the red in the third quarter, but that was an improvement from Q2, when tenants shed 359,636 SF and as Orange County and much of the…

ACTIVITY SWOONS FROM COVID-19 LOCKDOWN Leasing activity slowed dramatically in the second quarter as the economic disruption of Covid-19 forced companies to temporarily close offices, furlough workers and transition others to work remotely. There were 252 lease transactions from April through June, a 43% reduction compared to the first quarter. The volume of space leased in Q2 also fell 39% to 1.1 million SF. In contrast, there was more leasing during the worst of the…

Demand Flags Amid Covid-19 Uncertainty The sudden economic downturn brought on by the Covid-19 pandemic dramatically cut second-quarter leasing activity and deal volume to their lowest levels since the 2008-09 recession. Net absorption also fell into the red in Q2 as the vacancy rate ticked up 30 basis points to 3.5%. There were 367 lease deals in Q2, a nearly 26% decline from the first quarter, and leasing volume fell 51% to 2,072,884 SF, an…